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Rentrak Corporation (RENT - Snapshot Report) posted operating loss of 21 cents per share in the fourth quarter of fiscal 2014, ending Mar 31, much wider than the Zacks Consensus Estimate of a loss of 5 cents. However, the reported loss was a couple of cents narrower than 23 cents loss per share incurred in the year-ago quarter attributable to an improvement in top line.
Including non-recurring items, Rentrak reported loss per share of 17 cents in the quarter, in line with year-ago results.

Behind the Headlines

Revenues for the quarter improved nearly 40% year over year to $21.6 million, on the back of a 94% surge in the TV Everywhere business.  The company surpassed revenue growth expectations in most of its lines of business. However, the top line marginally missed the Zacks Consensus Estimate of $22 million.

Though cost of revenue increased 20%, a higher magnitude of revenue increase drove gross margin by 300 basis points.

Operating expenses in the reported quarter flared up 42% year over year to $17.1 million due to higher contingent consideration for the iTVX acquisition last year, increase in headcount and higher operating costs to support revenue growth.

Adjusted EBITDA of $1.9 million jumped from $0.13 million in the year-ago quarter.

Full-year Highlights

For fiscal 2014, Rentrak incurred a loss of 59 cents per share, much narrower than the loss of $2.10 per share incurred in fiscal 2013.

Revenues improved 33% year over year to $75.6 million in fiscal 2014.

Financial Update

Rentrak exited fiscal 2014 with cash and cash equivalents of $5.1 million, up 33% over fiscal 2013 end.

Total asset increased 13% year over year to $81.3 million at Mar 31.

Stockholders' equity was $52.2 million on Mar 31, up 8.7% year over year.

Cash inflow from operations in fiscal 2014 was $6.3 million, comparing favorably with cash outflow of $1.6 million in the prior fiscal.

Looking Forward

Rentrak envisions 80% annual growth in its TV Everywhere business revenues, 12% annual growth in Movies Everywhere business revenues and 20% annual growth in its OnDemand Everywhere revenues over the long term that combined will continue to fuel overall revenue growth. However, the company estimates a 5% annual decline in its Other services revenues.

Zacks Rank and Other Players

Rentrak presently carries a Zacks Rank #5 (Strong Sell). Among the better-ranked business service providers, Avis Budget Group, Inc. (CAR - Analyst Report), Viad Corp. (VVI - Snapshot Report) and RPX Corporation (RPXC - Snapshot Report) beat their respective Zacks Consensus Estimate in their last reported quarter. All these stocks carry a Zacks Rank #2 (Buy).

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